Microsoft to buy Nokia's phone unit for $7.17 billion

[News_Editor]

ESPOO, FINLAND (BNO NEWS) -- Technology giant Microsoft Corp. is buying Nokia's mobile phone business and a portfolio of patents and mapping services, the companies announced on Tuesday, in an attempt by Microsoft to compete directly with companies such as Apple and Google.

The companies said the board of directors for both companies approved the agreement, under which Microsoft will pay $5 billion (3.79 billion euros) to purchase essentially all of Nokia's Devices & Services business, and $2.17 billion (1.65 billion euros) to license Nokia's patents and use its mapping services, for a total transaction price of $7.17 billion (5.44 billion euros) in cash.

Microsoft, which is seeking to compete more directly with Apple and Google to provide services on any kind of Internet-connected device, said the deal announced on Tuesday will aim to accelerate the company's share in mobile devices through faster innovation, increased synergies, and unified branding and marketing

"It's a bold step into the future - a win-win for employees, shareholders and consumers of both companies," said Microsoft CEO Steve Ballmer. "Bringing these great teams together will accelerate Microsoft's share and profits in phones, and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services."

Ballmer said Nokia, which entered into a partnership with Microsoft in February 2011, brings "proven capability and talent" in critical areas such as hardware design and engineering, supply chain and manufacturing management, and hardware sales, marketing and distribution.

"We are excited and honored to be bringing Nokia's incredible people, technologies and assets into our Microsoft family. Given our long partnership with Nokia and the many key Nokia leaders that are joining Microsoft, we anticipate a smooth transition and great execution," Ballmer said, although the deal is still subject to approval by Nokia's shareholders, regulatory approvals and other closing conditions.

For Nokia, the sale of its mobile phone business is expected to be "significantly accretive to earnings," strengthen its financial position, and provide a solid basis for future investment in its continuing businesses. "This is an important moment of reinvention and from a position of financial strength, we can build our next chapter," Nokia Interim CEO Risto Siilasmaa said.

Siilasmaa added: "After a thorough assessment of how to maximize shareholder value, including consideration of a variety of alternatives, we believe this transaction is the best path forward for Nokia and its shareholders. Additionally, the deal offers future opportunities for many Nokia employees as part of a company with the strategy, financial resources and determination to succeed in the mobile space."

Siilasmaa was Chairman of the Nokia Board of Directors but became the company's interim CEO as part of Tuesday's announcement. Stephen Elop has stepped aside as Nokia's president and CEO, instead taking on the role of executive vice president of Devices & Services.

The transaction announced Tuesday is expected to be completed in the first quarter of 2014.

(Copyright 2013 by BNO News B.V. All rights reserved. Info: [email protected].)

[NeverSure]

Microsoft really missed the boat via Android/Linux. I don't think they saw the explosion of smart phones and tablets coming, and let too many others beat them. Now they are way behind the curve.

I just bought a tablet with Windows 8 ONLY because it will interface with Server in an enterprise environment, and it will run Office. I fact it shipped with Office.

But most people don't need their devices to connect to their account on Server, so for now this will be used by companies big enough to have an IT department and Server with Active Directory. Android won't work for that.

But the vast majority of people just want the basic functions of a phone/computer and all that Android will do.

Android was developed by Google and is free. Microsoft makes its money selling software. How many people will be willing to pay for the device, plus Windows and Office? I paid something like US$449 on sale in the US, and with just Android could have paid $250.

As more and more people learn that they are using Linux (Android) I think they will be more open to buying a laptop or desktop with the same. After all they've already learned it. Where does that leave Microsoft, other than selling to enterprises?

[JLCrab]

Well OK but according to Business Week in August 2005:

In what could be a key move in its nascent wireless strategy, Google has quietly acquired start-up Android Inc., Business Week Online has learned.

... but I guess you could say Google developed it from there. I like the word 'nascent'.

[TallGuyJohninBKK]

As more and more people learn that they are using Linux (Android) I think they will be more open to buying a laptop or desktop with the same. After all they've already learned it. Where does that leave Microsoft, other than selling to enterprises?

I think that's an interesting/telling point.

For my entire career in business, I used Windows PCs and laptops, and used them perfectly fine.

But now that I'm retired, I got my first Android smartphone a couple years ago (replacing Nokia-Symbian and Windows Mobile phones), and then my first Android tablet a year or so ago, and use those just fine.

I still use my Windows laptops and desktops at home for my basic computing, mainly because I need and want a keyboard and mouse for productivity.

But at this point in the evolution of technology, if someone were to offer me an Android based laptop or desktop option in those traditional form factors, I've been scratching my head trying to figure what if anything I'd lose in capability vs the Windows platform.

And frankly, at this point, I can't think of much anything I'd lose or that would prevent me from ditching Windows altogether, and making my desktops and laptops join the same OS as my phone and tablet.

That's why, among other reasons, I wouldn't be an investor in Microsoft these days, whether or not they buy out Nokia.

.

[JLCrab]

Smart phones are great for when you want to travel but I don't want to travel.

[NeverSure]

As more and more people learn that they are using Linux (Android) I think they will be more open to buying a laptop or desktop with the same. After all they've already learned it. Where does that leave Microsoft, other than selling to enterprises?

I think that's an interesting/telling point.

For my entire career in business, I used Windows PCs and laptops, and used them perfectly fine.

But now that I'm retired, I got my first Android smartphone a couple years ago (replacing Nokia-Symbian and Windows Mobile phones), and then my first Android tablet a year or so ago, and use those just fine.

I still use my Windows laptops and desktops at home for my basic computing, mainly because I need and want a keyboard and mouse for productivity.

But at this point in the evolution of technology, if someone were to offer me an Android based laptop or desktop option in those traditional form factors, I've been scratching my head trying to figure what if anything I'd lose in capability vs the Windows platform.

And frankly, at this point, I can't think of much anything I'd lose or that would prevent me from ditching Windows altogether, and making my desktops and laptops join the same OS as my phone and tablet.

That's why, among other reasons, I wouldn't be an investor in Microsoft these days, whether or not they buy out Nokia.

.

Good points. Windows and Office avoid having to use we based email, and will give you Excel, Word.etc. etc. There are also a lot of third party apps out there like Photoshop, so Android/Linux has a way to go. They could make it possible to install the free stuff from Open.Org but AFAIK that isn't available yet?

So today, a Windows based machine is a lot more versitile, but many people don't need those apps.

[TallGuyJohninBKK]

Never, even as of today, I believe there are pretty good Android app options for most if not all things that people commonly do on Windows OS machines.

My phone and tablet both run Kingsoft Office, which seems a pretty capable MS Office replacement. And there are several other Android app packages that fit into that same category...all for a fraction of the price of MS Office.

Likewise, there are quite a few different Android OS image editing apps, perhaps not with the full range of a full Windows Photoshop package, but certainly enabling the things that most consumers and casual users typically do with images.

Give me those on an Android based laptop or desktop with a keyboard and mouse and/or touch interface, and I think I'd be doing just fine.

Now, in thinking about it more, I'm not sure I could say the same thing about Android apps at present for things like video and audio editing, which I do from time to time with Windows-based software. But there certainly could be... And I'm not sure how many other typical Windows desktop or laptop users are using them for audio and video editing, anyway.

As for email, of course, there's MS Outlook and Gmail apps for Android that work just fine, AFAIC... My wife works for a private school here, and their whole email system for faculty and staff is run through Gmail with a custom domain name.

Given how MS seems to be lost in the forest and unable to execute well on much of anything they try these days, I'm just waiting for someone to give me the option of a reasonably priced Android OS laptop or desktop.

I'm not ready to chuck out my Windows laptops and desktops at this point. But I'd love to give an Android machine a try.

Edited September 3, 2013 by TallGuyJohninBKK

[Teddy1]

This is great deal for Microsoft,.......

[RickBradford]

Hurrah, say Nokia shareholders, as their share price jumps 40% in a single day.